Global advertising rates are set to rise 3.9% over 2020 and 3.1% over 2021, according to a new report by media agency GroupM, titled This Year Next Year Worldwide Media Forecast. Advertising rates grew 4.8% in 2019 and 5.7% in 2018.
Further, growth is expected to range between 3% and 4% through 2024, similar to what was observed during 2012–2014. Global advertising market during 2020 will amount to $628 billion.
A substantial share of global advertising is now accounted for by digital-first brands such as Alibaba, Alphabet, Amazon, Booking.com, eBay, Facebook, IAC, JD.com, Netflix and Uber, all of whom are each now $1 billion plus advertisers, accounting for $36 billion in spending during 2018, up by a quarter over 2017 levels. Growth in 2019 is presumed to be very similar. Combined, this small group of companies accounts for a majority of the world’s growth in spending on advertising.
With nearly 40% of the world’s total and a still-robust advertising market in 2020 and beyond (at 4–5% growth excluding directories, direct mail and political advertising), the U.S. is helping raise global averages. By 2024, India is also expected to be the fifth largest advertising market, maintaining double-digit growth rates (an estimated 12–13% each year from 2020 to 2024, similar to 2019 levels).
“In 2020, India faces challenges and uncertainties across sectors, just like other markets. However, this also brings opportunities for brands to innovate. This will be propelled by greater use of technology and better content across media," Prasanth Kumar, CEO, GroupM South Asia, said in a statement.
Despite the inclusion of digital extensions associated with TV in some markets (including the US and UK) and various other advancements, TV is unlikely to grow in the future on an underlying basis, remaining just under $170 billion in annual ad revenue each year through 2024. This has occurred as some advertisers shifted some budgets out of TV and into digital, and other advertisers shrank in size and reduced media spending, including TV. Television now commonly represents around 40% of a typical large brand’s media budget, or 27% on average across all advertisers, for 2020.
Accounting for 52% of global advertising, digital is taking share of advertising in almost every country in 2019 and should do so in all of them in 2020.
Meanwhile, outdoor advertising—a sector with $39 billion in global ad revenue during 2019—indicates growth slowing from 5.3% in 2018 to 1.8% this year, 2.5% in 2020, and 3–4% growth rates in most subsequent periods. Radio accounts for $31 billion in activity this year, and has generally been less robust than outdoor or television in recent years. Around the world, the industry declined by 1.1% in 2019 and should grow by 1.8% in 2020. While once dominant in almost every country, print’s struggles selling advertising have been pronounced. Newspapers should account for $39 billion in ad revenue during 2019, down by 11% versus 2018 levels and down from a peak of $123 billion in 2006.